Key Details
Old-age Security in the South Asia–Gulf Migration Corridor: Policy Challenges and Opportunities is an independent paper invited by the ILO STREAM Programme. It focuses primarily on lower- and middle-income Indian families with long residence in the UAE.
Area | What the Paper Finds |
|---|---|
Retirement income | Most non-national workers receive an end-of-service lump sum instead of a regular pension. The paper estimates that this may replace only 10–13% of pre-retirement earnings, against an international adequacy benchmark of around 40%. |
Indian workforce | More than nine million Indian nationals live across the Gulf, nearly half of them in the UAE. |
Portability gap | India has Social Security Agreements with several countries, but none with GCC members, preventing automatic aggregation or transfer of pension entitlements. |
Healthcare | Employer-funded health coverage generally ends with employment, while private insurance becomes more expensive with age and pre-existing conditions. |
Residence | Post-retirement visas exist but depend on income, savings, property or sponsorship by adult children. |
Evidence base | The analysis draws on secondary research and more than 40 interviews conducted through the author’s fieldwork since 2013. It is qualitative and not nationally representative. |
Gulf Migration Remains Temporary on Paper
GCC countries host approximately 10% of the world’s international migrant workers. Non-nationals constitute around half of the region’s population and as much as 90% in the UAE and Qatar.
Yet migration systems remain based on the assumption that workers will leave when employment ends. Residence permits are generally tied to work and periodically renewed, including for people who have spent most of their lives in the Gulf or were born there.
The paper identifies a growing mismatch: many Indian families now span multiple generations in the UAE, while retirement protection still largely assumes temporary employment followed by return to India.
End-of-Service Gratuity Does Not Provide Retirement Income
The UAE’s end-of-service indemnity is a lump-sum employer payment available after at least one year of continuous service. It is generally calculated at:
21 days of basic salary for each of the first five years; and
30 days for each subsequent year, subject to an overall ceiling.
Because allowances are excluded and the benefit is paid as a lump sum, it does not provide a predictable retirement income. Savings may also be used immediately for debt repayment, children’s education or property purchases.
A voluntary alternative introduced in 2023 allows employers to contribute to regulated investment funds, with savings portable between participating employers. However, employers must opt into the scheme, while investment performance and charges affect the final benefit.
The paper therefore proposes progressively moving towards a mandatory contributory retirement system, with the option of converting accumulated savings into periodic income.
Indian Pension Coverage Does Not Follow Workers Abroad
India’s National Pension System is available voluntarily to NRIs and Overseas Citizens of India, although evidence on participation among Gulf workers is limited.
EPFO coverage stops when a worker leaves covered employment in India. Someone migrating early in their career may therefore accumulate little pension or provident-fund protection at home.
India’s Mahatma Gandhi Pravasi Suraksha Yojana, which combined pension savings and insurance for overseas workers, was discontinued in 2017 after low enrolment. Kerala operates a contributory pension for overseas migrants, but such arrangements remain limited in value and geographical reach.
Without an India-GCC Social Security Agreement, there is no automatic mechanism to:
combine contribution periods in India and the Gulf;
transfer accrued benefits into Indian pension arrangements; or
provide structured cross-border retirement income after return.
Healthcare and Residence Can Determine Whether Retirees Can Stay
Retirement security also depends on the ability to retain health insurance and legal residence. Employer-supported health coverage usually ends at retirement, while insurance remains necessary for residence renewal.
The paper reports sharply higher premiums after age 60, particularly for people with chronic illnesses. Some retirees consequently seek treatment in India, draw on retirement savings for healthcare or find remaining in the UAE financially difficult.
Alternative residence routes—including sponsorship by adult children, property- or investment-linked visas and retiree visas—require varying combinations of income, savings, housing and insurance. Many lower- and middle-income retirees may therefore be unable to qualify.
Adult children can consequently become the de facto retirement safety net, supporting housing, insurance and everyday expenses.
The Paper Calls for Cross-Border Retirement Protection
The proposed reforms span both destination and origin countries:
progressively replace gratuity with a mandatory, regulated contributory retirement fund;
enable accumulated savings to provide periodic cross-border retirement income;
establish bilateral or multilateral social-security arrangements with major labour-origin countries;
improve affordable healthcare and elder-care access for retirees;
provide more flexible residence pathways for long-term residents; and
improve data on ageing migrants, retirement, income, health and return migration.
These are the author’s proposals, not adopted policies of the UAE, India or the ILO.
Policy Relevance
For India, Gulf migration policy has concentrated largely on recruitment, worker protection and remittances. The paper brings the end of the migration cycle into focus.
Social-security negotiations: India’s existing agreements with other countries offer administrative experience, although GCC employment systems and gratuity arrangements require a different design.
Pension access: NPS enrolment, contribution continuity and low-cost cross-border payments could be made easier for overseas workers rather than depending on workers to navigate domestic systems independently.
Return preparedness: States with large Gulf migrant populations need stronger links between overseas-worker databases, health services, pension assistance and return-migrant support.
Healthcare planning: Returning retirees may bring chronic illnesses associated with age and long working lives abroad. Kerala’s experience is particularly relevant for anticipating demand.
Evidence gaps: The qualitative study identifies important risks but cannot measure their national scale. India needs better information on migrants’ age, contribution histories, expected return, savings and healthcare requirements.
Follow the Full Paper Here: Old-age Security in the South Asia–Gulf Migration Corridor: Policy Challenges and Opportunities